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Human-engineered capture of CO2 emissions at the point source and subsequent long-term storage of this CO2 underground represent a potential mitigation strategy for global warming. The so-called carbon capture and storage (CCS) projects are technically feasible but have not been well established from an economic efficiency perspective. This chapter uses economic theory to describe the costs, benefits, and economically efficient level of CCS provision. Achieving the economically efficient level of CCS provision requires consideration of both the private and public costs and benefits of CCS and will also likely require some degree of government intervention in the form of economic incentives and/or direct regulation.

The production of many crops depends on biotic pollination. As pollinator populations decline, assessments of the potential consequential loss of economic value are critical. We estimate the economic value of pollination services ($608 million), crop vulnerability ratio (21 percent), and pollination’s contribution to agricultural production value (5 percent) for Georgia.

This paper presents a dynamic crop rotation model that shows how crop yield and price volatility could impact crop mix and acreage response under crop rotation considerations. Specifically, a discrete Markov decision model is utilized to optimize producers’ crop rotation decision within a finite horizon. By maximizing net present value of expected current and future profits, a modified Bellman equation helps develop optimum planting decisions. This model is capable of simulating crop rotations with different lengths and structures. Specifically, the corn-soybeans rotations were simulated using the crop rotation model.

In this paper, a dynamic optimization model was developed to simulate how farm-level realized price and profitability respond to yield change which was induced by climate change. Producers' acreage response was included in the dynamic model considering crop rotation effect. In the crop rotation model, a modified Bellman equation was used to dynamically optimize the net present value of farm profit for a five-year interval. This simulation process was repeated through the year 2050. Then yield, price, and acreage response were compiled to generate realized profit. Results generally indicated that reduction in crop yields due to climate change results in reduced farm profitability for most of the states studied. Predicted climate change is more likely to pose a problem for agricultural production and profitability in the southern U.S. states as compared to the northern U.S. states. Our results also suggest that acreage response alone is not sufficient to ameliorate the potential negative effects of global climate change on agricultural production and profitability. The results of this research are expected to provide a foundation for future related research to aid producers' crop rotation decisions in an unstable price environment.

Using estimation of demand for the George Washington/Jefferson National Forest as a case study, it is shown that in a stratified/clustered on-site sample, latent heterogeneity needs to be accounted for twice: first to account for dispersion in the data caused by unobservability of the process that results in low and high frequency visitors in the population, and second to capture unobservable heterogeneity among individuals surveyed at different sites according to a stratified random sample (site specific effects). It is shown that both of the parameters capturing latent heterogeneity are statistically significant. It is therefore claimed in this paper, that the model accounting for site-specific effects is superior to the model without such effects. Goodness of fit statistics show that our empirical model is superior to models that do not account for latent heterogeneity for the second time. The price coefficient for the travel cost variable changes across model resulting in differences in consumer surplus measures. The expected mean also changes across different models. This information is of importance to the USDA Forest Service for the purpose of consumer surplus calculations and projections for budget allocation and resource utilization.

The objective of this study is to compare the effects of climate change on crop yields across different regions. A Principal Component Regression (PCR) model is developed to estimate the historical relationships between weather and crop yields for corn, soybeans, cotton, and peanuts for several northern and southern U.S. states. Climate change projection data from three climate models are applied to the estimated PCR model to forecast crop yield response. Instead of directly using weather variables as predictor variables, the PCR model uses weather indices transformed from original weather variables by the Principal Component Analysis (PCA) approach. A climate change impact index (CCII) is developed to compare climate change effects across different regions. The key contribution of our study is in identifying a different climate change effects in crop yields in different U.S. states. Specifically, our results indicate that future warmer weather will have a negative impact for southern U.S. counties, while it has insignificant impact for northern U.S. counties in the next four decades.

One of the major shortcommings of past environmental Kuznets curve (EKC) studies is that the spatiotemporal aspects within the data have largely been ignored. By ignoring the spatial aspect of pollution emissions past estimates of the EKC implicitly assume that a region’s emissions are unaffected by events in neighboring regions (i.e., assume there are no transboundary pollution emissions between neighbors). By ignoring the spatial aspects within the data several past estimates of the EKC could have generated biased or inconsistent regression results. By ignoring the temporal aspect within the data several past estimates of the EKC could have generated spurious regression results or misspecified t and F statistics. To address this potential misspecification we estimate the relationship between state-level carbon dioxide emissions and income (GDP) accounting for both the spatiotemporal components within the data. Specifically, we estimate a dynamic spatiotemporal panel model using a newly proposed robust, spatial fixed effects model. This new estimation scheme is appropriate for panels with large N and T. Consistent with the EKC hypothesis we find the inverted-U shaped relationship between CO2 emissions and income. Further, we find adequate evidence that the underlying economic processes driving carbon dioxide emissions and state-level GDP are temporally and spatially dependent. These findings offer policy implications for both interstate energy trade and pollution emission regulations. These implications are particularly important for the formulation of national policies related to the 2009 Copenhagen Treaty in which the U.S. has committed to significantly reduce greenhouse gas emissions over the next twenty years.

One of the major criticisms of past environmental Kuznets curve (EKC) studies is that the spatiotemporal aspects within the data have largely been ignored. By ignoring the spatial aspect of pollution emissions past estimates of the EKC implicitly assume that a region’s emissions are unaffected by events in neighboring regions (i.e., assume there are no transboundary pollution emissions between neighbors). By ignoring the spatial aspects within the data several past estimates of the EKC could have generated biased or inconsistent regression results. By ignoring the temporal aspect within the data several past estimates of the EKC could have generated spurious regression results or misspecified t and F statistics. To address this potential misspecification we estimate the relationship between state-level carbon dioxide emissions and income (GDP) accounting for both the spatiotemporal components within the data. Specifically, we estimate a dynamic spatiotemporal panel model using a newly proposed robust, spatial fixed effects model. This new estimation scheme is appropriate for panels with large N and T. Consistent with the EKC hypothesis we find the inverted-U shaped relationship between CO2 emissions and income. Further, we find adequate evidence that carbon dioxide emissions and state-level GDP are temporally and spatially dependent. These findings offer policy implications for both interstate energy trade and pollution emission regulations. These implications are particularly important for the formulation of national policies related to the 2009 Copenhagen Treaty in which the U.S. has committed to significantly reduce greenhouse gas emissions over the next twenty years.

Estimating regional demand models by pooling different samples without correcting for such differences causes model misspecification as each sample belongs to a different population. Weighted regression using Pseudolikelihood to account for differences in sample population with adjustment for heteroskedasticity improves efficiency but the estimates are biased. We estimate regional demand for National Forest settings types in the southeastern states of U.S using weighted and unweighted regression. Using estimation of demand for National Forests as a case study, we resolve problems relating to inference about the data generating process when different samples are pooled together. We show that though efficiency of weighted estimates improves after correcting for heteroskedasticity, they still remain biased as the weights interact with covariates to explain part of model misspecification. In this paper, we show that it is best to use unweighted regression including interactions with weights as covariates.

Irrigated acreage is an important indicator for agricultural water demand which is a major category of water use. Three methodologies were applied in this study to project irrigated acreage of major crops in Georgia from 2010 to 2050. These three methodologies show consistent results. Total irrigated acreage of major crops in Georgia is projected to increase for the next 40 years. The acreage projection results provide useful information for Georgia agricultural policy makers and farmers. However, the methodologies used in the study have some limitations. They can only be used under certain assumptions. Thus, better methodologies are needed for future related research.

Water quality trading (trading) as a means to improve water quality has become an increasingly popular instrument considered by environmental policy makers. Although the U.S. Environmental Protection Agency lists more than forty current trading programs in the U.S., only a few active markets exist. The literature identifies several hurdles to trading, overcoming which requires a deeper understanding of the interaction between local environmental, legal, and economic conditions. Particular challenges include thin markets, uncertainty related to the course and fate of nutrient flows, varying degrees of political support, and high transaction costs related to market infrastructure, monitoring, and enforcement. These hindrances often arise from and contribute to the confinement of trading to tight ecological and political boundaries. This paper explores the effect of these boundaries on the potential for trading in two southeastern reservoirs and their respective watersheds. Results provide insight into the effects of the spatial expansion of markets. These findings contribute to the current dialogue that seeks to better understand barriers to trading.

A model of land allocation at the aggregate watershed level was developed assuming profit/net benefit maximization under risk neutrality. The econometric land use model was analyzed as an equation by equation SURE model as all the independent variables were the same for both equations. In analyzing effect of land use change on water quality, we took year 2005 as our baseline and postulated three land use scenarios. We applied Benefit Transfer techniques to value water quality changes resulting from land use change and estimated lower bounds for WTP to improve water quality to meet the FCB criterion for drinking water supply and fishing waters and BOD (DO) criteria for fishing waters. Water quality modeling revealed that land use change would result in increased runoff, and associated increase in FCB and BOD/DO violations. But the BOD/DO violations could be curtailed by managing urban growth as evidenced absence of BOD violations in the managed growth scenario. Our study finds there may be problems of FCB under all postulated future land use scenarios. The findings also support existing literature that there are problems with FCB violation in the study area at the moment. Finally, it seems that the people of UCRB would be willing to pay a lower bound value between USD 15,785,740 and USD 16,141,230 per year to create and maintain quality standards for fishing and drinking water supply.

This study seeks to forecast land use change in a North Georgia ecosystem, and estimate the economic value of the ecosystem using benefit transfer techniques. We forecast land use change based on a structural time series model and a simple growth rate model. The study suggests a lower bound willingness to pay value of about USD 16,000 per year to ensure compliance with fishing and drinking water quality standards with regard to fecal coliform bacteria and dissolved oxygen. Conservation efforts are likely to cost less than the cost of defensive behavior or ecosystem restoration.

Spatial differences in site characteristics and user populations may result in heterogeneity of recreation preferences and values across geographic regions. Non-linear mixed effects models provide a potential means of accounting for this heterogeneity. This approach was tested by estimating a national-level recreation demand model with encouraging results.

The study proposes a discrete-choice model for environmental policy/program valuation, to be used in cases when several policies are valued sequentially. The stochastic specification of the model is consistent with the transitivity and continuity axioms of utility analysis. An empirical methodology for the model is suggested. An application of this model to WTP estimation for Little Tennessee River watershed ecosystem restoration is provided. Findings from the application agree with the hypothesized agent's behavior.

Because of pressures to convert natural areas to commercial economic development uses, protecting natural areas in developing countries is a major challenge. A developing country may desire to protect natural areas, but relatively high out-of-pocket and opportunity costs of protection may pose considerable hurdles. To help protect natural areas in a developing country, the international community often gets involved; for example, providing funds to purchase and preserve natural areas such as rain forests, river corridors and wetlands. Thus, to determine the economic feasibility of protecting a particular natural area in their country, decision-makers in a developing country may be interested in measuring the economic value (e.g., willingness-to-pay) of protection on the part of both residents and nonresidents of the country. The overall purpose of this study was to test a common methodology for measuring both domestic and international citizen groups' values (willingness-to-pay) for protecting a natural area in a developing country. The natural area studied was a wetland area called the Nariva Swamp located in the developing country of Trinidad. A common contingent valuation survey was conducted both in Trinidad and the State of Georgia, USA. The survey instrument worked well in both countries demonstrating the feasibility of administering a common valuation methodology to very different citizen groups living in developing and developed countries. The Nariva Swamp in Trinidad is one of the largest freshwater wetlands in the Caribbean, supporting a diverse population of flora and fauna, including waterfowl, anacondas, and manatees. The swamp also supports recreation in the form of hunting, fishing, and ecotourism. Furthermore, subsistence rice and vegetable farming and subsistence fishing of cascadura fish and conchs occur in the swamp. However, some commercial rice production by local residents, who do not have legal ownership of land, is causing serious environmental damage to the swamp. Overuse of water due to commercial rice production with itinerant irrigation canals has increased the influx of sea water into the swamp, thereby increasing salinity of water in the swamp. If this continues, it could be devastating for flora and fauna in the swamp, local subsistence farming and fishing, and future ecotourism benefits. In order to avoid a worst-case scenario, human activities in the swamp should be balanced to provide economic benefits while protecting the ecosystem functions and services that support these benefits. Attaining such a balance requires knowledge of Nariva Swamp values and benefit-cost analyses of swamp use and management. The contingent valuation method can be applied to measure use and nonuse values of protecting natural areas. The contingent valuation survey instrument for measuring values of protecting the Nariva Swamp to Trinidad and Georgia, USA citizens was developed jointly by researchers at the University of the West Indies and the University of Georgia. The survey instrument collected data on qualitative attitudes and preferences for Nariva Swamp protection, and quantitative data to estimate willingness-to-pay (WTP) for protecting the swamp. The survey instrument was administered to a sample of general public citizens in both countries. From these data, a common valuation model was estimated and used to calculate mean WTP for Nariva Swamp protection on the part of Trinidad and Georgia citizens. The valuation model generated theoretically consistent and expected results. Trinidad respondents show a higher WTP than Georgia respondents due to greater familiarity and proximity with the Nariva swamp. In this case study, the valuation results suggest that monetary support from USA citizens for protecting the Nariva Swamp may be relatively low. Thus, the economic feasibility of protecting the swamp would likely depend mostly on a domestic analysis that compares benefits (e.g., aggregate willingness-to-pay) and costs to Trinidad citizens of protecting the swamp. Whether or not benefits to the international community should even be considered in a developing country's benefit-cost analysis of protecting a domestic natural area is open to debate and discussion. If benefits of protecting a natural area to the international community are considered by decision-makers in a developing country to be relevant and important, a question for discussion remains as to whether a different natural area in a different developing country would generate more interest and WTP for protection on the part of the international community. To obtain more insight on the causes of differences in preferences and values between developing and developed country citizens for protecting a natural area in a developing country, survey responses to a series of environmental values and attitudes questions were also analyzed. Responses to environmental value questions indicate the relative weight Trinidad and Georgia citizens place on use and nonuse values of Nariva Swamp protection. We were interested to learn if nonuse values of Nariva Swamp protection are important to Trinidad citizens, and if use values are important to Georgia citizens since part of the purpose of the overall study was to gauge the potential of the Nariva Swamp as an international ecotourism destination. Results suggest that relatively few Georgia citizens would be interested in visiting the Nariva Swamp, but very many Trinidad citizens would like to visit the swamp. Nonuse values appeared to represent a small portion of Trinidad citizens support for Nariva Swamp protection. We also compared responses from Trinidad and Georgia citizens to questions designed to assess their general environmental ethics and attitudes towards natural area protection. Research literature suggests that, generally, respondents from more economically developed countries should show a greater interest in environmental issues and natural area protection. This is due to a shift from focus on physical sustenance and safety to a broader understanding and appreciation for quality of life, based on Maslow's hierarchy of needs. However, more recent research suggests this approach could be inaccurate. The survey results provide evidence of consistent environmental ethics and natural area protection attitudes on the part of Trinidad and Georgia citizens, with some notable differences that would provide for interesting debate and discussion.

The paper discusses an application of Chamberlain's fixed effects model to contingent valuation method survey data obtained for eight management alternatives for the Little Tennessee River basin. The advantages of using this approach versus cross-sectional logit, pooled logit, and cross-sectional logit with lags are discussed and a technique to obtain willingness-to-pay estimates from estimated coefficients is offered. Drawbacks of using Chamberlain's fixed effects model, difficulties encountered, and directions for further research are presented.

A logit model was used to determine the major factors explaining willingness to participate of an individual in the wilderness or other primitive area visits. The results of the study showed that education and environmental awareness were in wilderness participation decision. Demographic variables like age, race, and sex also were statistically significant and emerged as important policy variables in defining wilderness participation behavior. Characteristics of wilderness areas like crowdness, pollution, and poor management failed to produce any significant impacts in the decision making process of wilderness area visit.

The potential sensitivity of environmental resource valuation to payment vehicles is of interest to researchers and decision-makers involved in estimating and applying these numbers. A conceptual model is developed which provides insight into how the different payment vehicles of a special tax and a tax reallocation affects the willingness to pay (WTP) for environmental goods. Hypothesis testing using contingent valuation data suggests WTP with a tax reallocation is higher than WTP with a special tax for ground water quality protection in Georgia and Maine.

A computerized survey instrument was developed to estimate the economic value of riparian restoration along the Little Tennessee River in western North Carolina. Restoration benefits were described in terms of five indicators of ecosystem services: abundance of game fish, water clarity, wildlife habitat, allowable water uses, and ecosystem naturalness. An iterative sequence of dichotomous choice contingent valuation questions were presented to local residents to assess household willingness to pay increased county sales taxes for differing amounts of riparian restoration. Our results showed that the benefits of ecosystem restoration were "super-additive". That is, the total value of conducting many restoration projects exceeded the sum of the value of projects evaluated independently or at too small of a spatial scale. We also estimated the costs of riparian restoration activities by collecting and analyzing data from riparian restoration projects in the study area. After adjusting our estimated valuation function for socio-economic characteristics of the population, the benefit/ cost ratio for riparian restoration throughout the entire watershed was about 2.2 to 1.

Future demand projections reported in this paper indicate a steady increase in demand for outdoor recreational opportunities in U.S. regions where BLM lands are located. From a supply perspective, BLM lands represent "prime targets" for meeting increased recreational demand in the western U.S. The BLM will face the challenge of balancing increased recreation use with other multiple uses, and minimizing the negative environmental impacts of increased recreation use such as damages caused by motorized vehicles, horses and foot traffic. In the future, the BLM will also face management challenges related to financing the provision of increased recreational opportunities.

There are a multitude of interdisciplinary values that people derive from rural land. Productivism focuses on the commodity values of rural land, such as the use of land as a commercial input into agricultural production, timber harvesting and mineral extraction. Productivistic uses and values of rural land have been the traditional focus of rural land policy and management in the United States. Many rural areas in the United States are moving into a postproductivism era. Postproductivism focuses on both commodity and amenity values of rural land. Amenity values of rural land include recreational, aesthetic and ecological service values. When a rural area moves from productivism to postproductivism, value conflicts may arise between individuals and groups who have different preferences with respect to commodity and amenity values. Traditional rural institutions may not be set up to effectively handle such conflicts. There is a need to explore what types of institutions may be most effective in resolving rural land use problems related to the different and often competing values people place on rural land and landscapes.

This paper provides an overview and a meta analysis of existing US contingent valuation studies of groundwater quality. Using 108 observations from 14 studies, core economic variables, risk variables, and elicitation effects are found to systematically influence groundwater values. Other research design features are also investigated.